Assuming all else equal, if a household is optimistic about future income, it is likely to cause:
A) the current credit supply curve of the household to shift to the left.
B) an upward movement along the current credit supply curve of the household.
C) the current credit supply curve of the household to shift to the right.
D) a downward movement along the current credit supply curve of the household.
Question 2
Some economists believe that financing deficit spending by increasing taxes will lead to a lower level of national consumption and a higher level of national savings than deficit spending. The reason is
A) that people do not realize that taxes have increased also.
B) the interest rate on the debt will increase.
C) people will forgo private consumption now as society substitutes government goods for private goods.
D) people believe that they can consume the government provided goods and have future generations pay the bill.
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